But other sources show that the jobs market remains sluggish.
The first Friday of every month is jobs day, when the Bureau of Labor Statistics releases the unemployment report. But there was no unemployment report posted on Friday due to the government shutdown, as non-essential employees are furloughed.
Investors rely on jobs data as it is one half of the dual mandate of the Federal Reserve. The movement of the jobs market is a key indicator driving the Federal Open Market Committee’s interest rate decisions.
When the FOMC reduced rates in September for the first time in 2025, officials said that concerns about the jobs market were the primary concern. Job creation has been steadily decreasing, and unemployment has been rising.
Without this data, and the inflation data from the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) index, will the Fed’s decision-making be clouded?
It may, to some extent, but there are other sources for jobs data, including the ADP National Employment Report, which tracks private sector employment. It painted a bleak picture as it showed that the private sector lost 32,000 jobs in September. That comes just two months after 33,000 jobs were lost in June.
“Low hire, low fire, low gear mode”
Just recently, the Chicago Fed launched the Chicago Fed Labor Market Indicators report, which comes out twice monthly. It tracks the rate of layoffs and separations, the hiring rate for unemployed workers, and it forecasts the monthly BLS unemployment rate.
The October 2 release placed the unemployment rate at 4.32%, which would be up a tick from 4.32% in August. The hiring rate fell to 45.2% in September, from 45.6% in August, while the layoff rate held steady at 2.10%, up from 2.09%.
Another source for is the Challenger Report from Challenger, Gray and Christmas. The October 2 release reported that there were 54,064 job cuts in September, down 37% from August and 26% from September 2024.
However, there were 202,118 layoffs in Q3, the highest Q3 total since 2020. That’s up 16% from Q3 of 2024 but down 18% from Q2 2025. So far in 2025, there have been 946,426 job cuts, up 55% from the same period in 2024 and the most since 2020.
The Challenger Report also shows that hiring intentions are down. Through September, employers plan to add 204,939 jobs this year, down 58% from the first three quarters of 2024.
It is more difficult than usual to measure the state of the U.S. labor market, with gold-standard economic indicators produced by the federal government unavailable during the shutdown,” Adam Turnquist, chief technical strategist at LPL Financial, said. “The alternative data sources imply that the U.S. job market is still in a low hire, low fire, low gear mode.”
Overall, the alternative sources of data show no improvement in the jobs market in September. That means the Fed should still be on track to lower rates again in October. The CME FedWatch poll indicates that 96.7% of interest rate traders anticipate an October rate cut.
